-Refer to Table 18.4. For both countries to benefit from trade, the terms of trade must be between ________ case(s) of beer to case(s) of wine.

Question

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For both countries to benefit from trade, the terms of trade must be between the opportunity costs of producing the goods in each country. If one country can produce a case of wine at the cost of 1 case of beer and the other at 2 cases of beer, the terms of trade must be between 1:1 and 1:2.